Category: Forex Trading Strategies Analyzed

The Trading Strategy: Correlation — US Dollar Index Trading Trading Strategy Implementation: Correlation trading, just like all other sorts of trading approaches, comes in variety, and as a result it’s unfair to bulk the approaches as a single system. In order to be fair, we’re going to address one of the more common Forex correlation approaches — that being an effort to monitor US Dollar strength and weakness relative to two majors; and in doing so, look for overall US Dollar strength or weakness. This is a precarious way to trade because Dollar Indexing, as we like to it, can...

The Trading Strategy: Breakout — Close of Body Trading Strategy Implementation: Because there are a ton of breakout approaches out there that are frequently discussed by traders, we are going to try to define the differences of the ones we study by name. In this case, the Close of Body references a horizontal level that we define via candles as the range the market is looking to break out of. For starters, we need to define an area that is either choppy or congested. In terms of breakout strategies that we Pipsters have employed over the years, the one constant...

The Trading Strategy: Fib Level Confluence Trading Strategy Implementation: This strategy is created by the use of confluence with Fibonacci levels. Because there is some definite contention out there in the world of technical analysis regarding which levels have the most merit, we will simply apply the ones that are most commonly referenced. This is the 38.6, 50.0. 61.8, and the 78.6. The approach is relatively simple. The trader looks to find areas of Fibonacci confluence in order to time market turns. These areas of confluence are highly regarded, and often lead to market turns, which can, of course, produce...

The Trading Strategy: Three MA Cross Trading Strategy Implementation: Use three simple MAs at different speeds and trade the crosses of the two faster moving MAs with the slower moving average applied as governance for the trend or direction of trades. This is probably somewhat a wordy explanation, and will certainly be helped with the support of images, which are provided below. The idea is relatively simple. Three MAs are placed on a chart. In this case we are using the 15M chart. Chart preference is up to the trader. The Pipster belief is that the close to the tick...

The Trading Strategy: Two MA Cross Trading Strategy Implementation: Use the cross of the faster moving MA (in this case the 5 MA) over the slower moving MA (55 MA) as an entry. (MA selection and trading time frame, along with Money Management, would go on to create a trading system. We here are simply analyzing the strategy.) Profits are taken at three times the distance between the entry and the stop. Stops are set at the previous low (if a buy situation) or the previous high (if a sell situation) with room for the spread plus one pip. Of...